BANKS MUST CONTINUE TO CHANGE FOR NEW ZEALANDERS BENEFIT SAYS LUXTONLands
Minister of Commerce, Hon John Luxton, today said that New Zealands banks must continue to evolve in a changing world so that New Zealanders would receive the best service and rates possible.
New Zealanders need banks that give them the best service and rates possible. To resist or prevent change means New Zealanders will pay more for their mortgage on their house, more for their hire purchase on their new washing machine, and get less for their retirement savings than they should, Mr Luxton said today.
The Ministers comments follow speculation on the outcome of Australias Wallis Inquiry report by Alliance leader Jim Anderton. This inquiry is looking at existing restrictions in Australias financial services industry. Mr Anderton expressed concern about possible job losses in New Zealand if changes are made in Australia banking regulations to reduce existing restrictions.
I agree with Mr Anderton that it is always a concern when structural change is taking place in an industry and it impacts on employment. But banks must continue to change. Progress which benefits all New Zealands families and business should not be prevented from happening.
While the outcome of the Wallis Inquiry may impact on the ownership of New Zealands financial services, technology is already leaving its mark.
New Zealand has too many bank branches. With a population about the size of Sydneys we have about 1500 bank branches. In addition non bank players such as Ergo are having an impact by offering over the phone service for traditional bank products such as mortgages. With further developments in internet services, transactional telephone banking, and mobile bank consultants, the expensive bricks and mortar distribution channels are less needed and wanted by customers.
For some years there have been valid complaints about the cost of New Zealand banks margins. What we need is more competition which will inevitably lead to fewer branches. Preventing change in the banking sector is not going to help anyone, Mr Luxton concluded.